Semiconductor Alert! (Sept. 25-29)

Hello from Down-East Maine. Can it get any better? The U.S. is leading in the medal race at the Australian Olympics, the Nebraska Cornhuskers my school is No. 1 in college football, and the New York my old home town Yankees and Mets both made the playoffs. Not only that, my pro football teams, the Giants and Jets, are both leading their divisions.

Intel cancels Timna processor
because of technical problems

Intel has given up on its ballyhooed Timna processor. The chip giant abruptly terminated the low-end processor on Friday, saying only that it had run into too many development problems that would have delayed its introduction. Intel was trying to redesign the Direct Rambus DRAM interface so that it also could support SDRAM memory.

Timna's demise means that Intel won't have an integrated, on-chip Northbridge controller processor to compete with Transmeta's Crusoe, National Semiconductor's Geode, or the upcoming integrated processor from Via Technologies. An Intel spokesman confirmed the company doesn't have any highly-integrated processors under development now.

Intel will rely on its Celeron processor to compete in the very low-end PC market. The sub-$600-PC price point targeted by Timna is now being met by a combination of the Celeron, the 810 integrated graphics chip set, and lower-cost motherboards, he said. "Our customers told us they didn't need Timna to sell in this price range," the spokesman claimed.

Timna's main thrust was to be the low-end desktop PC, a market that the Transmeta and National chips are not targeting, and it also could have moved into mobile processors and Internet appliances, the markets targeted by the two competing processors.

Accelerating move to 300-mm fabs
may dump too many chips on market

Executives from the chip production gear industry must have suffered a bit of indigestion at SEMI's annual awards dinner this week. In the midst of a booming market, they got some bad news from John Pitzer of Credit Suisse First Boston who put out a warning on the industry's exploding move to the 300-mm wafer.

While demand for chips should continue to be strong next year, he predicted that the industry's rapid shift to the new generation of large wafers probably would dump too many products on the market. "The transition to volume manufacturing at 300 mm will oversupply the market," he predicted. The longer that chip makers wait to switch over to the larger wafers, the longer the current boom will continue, Pitzer predicted.

Pitzer still sees semiconductor capital spending growing strongly next year, however. His forecast shows sales in 2001 growing to $75.1 billion, up 25% from $57 billion this year. Spending on 300-mm wafer fabs will be even stronger in 2001, according to the forecast. The market for 300-mm tools is expected to explode, Pitzer predicted, growing to $6.1 billion in 2001, up 259% from $1.7 billion this year.

In August, a panel of semiconductor equipment analysts also had flashed a similar warning that the move to 300-mm wafers would most likely suffer one more slowdown before it really takes off as a production technology.

On the positive side, Pitzer said he remains extremely bullish about the chip-production equipment market as a whole. He cited strong chip demand in consumer, communications, and other market applications. This will drive worldwide fab equipment spending for the next couple of years. Fab tool purchases are expected to reach $40 billion in 2001 from $30 billion this year, he said.

"I think the chip-production equipment market will have some short-term disruptions," Pitzer said. "But I believe the semiconductor and semiconductor capital equipment cycle is entering into the second phase of an extended upturn."

Motorola sues Ruiz
for luring away executive

Motorola management must still be mad at Hector de J. Ruiz, former head of their chip business, for resigning suddenly last January to join Advance Micro Devices as president.

Motorola is now suing him because he allegedly broke a contract by recruiting Motorola chip executives to join AMD.
Ruiz signed an agreement not to solicit or induce certain members of the company's senior management to join AMD, Motorola claims. He was paid a "substantial six-figure amount" in return for his promise, but now, it states, Ruiz directly breached that agreement by luring away a senior Motorola finance officer.

Indeed, AMD had announced on the same day that Motorola filed suit the appointment of Motorola executive Robert Rivet as its senior vice president and chief financial officer. For the past three years, the 46-year-old Rivet had served as senior vice president and director of finance for Motorola's Semiconductor Products Sector.

Earlier in September, AMD reported that it had hired Harry Wolin, vice president and director of legal affairs at Motorola Semiconductor, as vice president of intellectual property. But it was unclear whether this move played a role in Motorola's decision to sue Ruiz. As of this week, AMD said it had not seen a copy of the suit and wouldn't comment.

Audi may have broken deadlock
over auto drive-by-wire bus standard

Audi has thrown its weight behind the original bus standard developed for data exchange among automotive electronic systems starting with the 2004 or 2005 model year. The German auto maker will use the Time Triggered Protocol, a move that most likely will launch the chip market for this approach and nudge other auto makers in this direction. Such a safety-critical bus will be required for steer- and brake-by-wire systems in next-generation automobiles.

Since Audi is a subsidiary of Volkswagen, industry watchers expect that other larger-volume car manufacturers will migrate to the TTP standard. And they might also cause BMW and Daimler-Chrysler to rethink their plans to develop their own safety-critical bus. An announcement on their jointly developed bus is expected soon. Noted an Audi engineer: "The choice is whether to do something new or use something that already exists. We all agree we want to reach one standard for the industry."

The lack of OEM backing was one of the primary reasons why a TTP-based system was being held up and was also dampening the enthusiasm of chip makers for the protocol. Motorola said earlier that it could not continue to pursue solutions based on TTP without an OEM customer coming out in favor of it.

Are the foundries going
to take over the world?

You gotta believe the big silicon foundries are climbing into the driver's seat now when the world's largest chip producer is talking to the leading foundry about making some of its chips.

A spokesman for Taiwan Semiconductor Manufacturing Co. confirms the giant foundry is continuing to hold talks with Intel on making a deal to make chips other than processors for the U.S. MPU giant. Nothing definite has been agreed to as yet, he says, even though talks between the two companies have gone on for a year.

TSMC had confirmed earlier this year that Intel was discussing the possibility of outsourcing chips to the Hsinchu-based foundry. Foreign media has speculated that such a deal would threaten other major customers of TSMC that are competitors of Intel. But industry sources believe the parts under discussion would be commodity-type parts such as Southbridge chips, USB chips, and other I/O chips that Intel uses in its chip sets and motherboards--or commodity parts that would be unrelated to chip sets or processors that compete with Intel rivals.

Would you believe a foundry is running
wafers 90 days after tools were installed?

A few years ago, making this kind of schedule would have been called a miracle. Today, I guess we take such achievements more or less for granted. But I'm impressed.

Wafers started running through a new, joint-venture fab in Singapore, just 90 days after the first chip-processing tools were installed. Owners of the new foundry, called Systems Manufacturing, are Taiwan Semiconductor Manufacturing Co. (TSMC) and Philips Semiconductors. The goal is to ramp up production to full capacity by 2002.

Construction of $1.2 billion fab got started only 15 months ago. Philips owning 48% of the fab, TSMC 32%, and Singapore's Economic Development Board Investments agency 20%, had disclosed the eight-inch wafer fab two years ago midway through the last semiconductor slump, a period when few if any new fabs were being announced.

Besides hitting the window for buying fab-tools, SSMC was also able to speed up the training of its new workforce by tapping a core startup team of more than 150 chip veterans from Philips in the Netherlands and from TSMC in Taiwan. Current workforce of 550 employees is expected to grow to 1,050 by June 2002, the time when fab is expected to be turning out 30,000 eight-inch wafers a month. Initial processes are 0.25- and 0.18-micron.

New Shanghai fab moves fast;
aims for production next year

Another new foundry has very ambitious plans for getting into production. Confirmation came this week that a new Shanghai-based foundry, led by Taiwanese chip veteran Richard Chang, will shortly break ground for its first wafer fab. It expects to move into pilot production by mid-2001.

Called Semiconductor Manufacturing International (SMIC), the $1 billion-plus fab will be built in the Pudong industrial park of Shanghai. The standard "green field" plant will reportedly be capable of processing 30,000 wafers a month at feature sizes of 0.35- to 0.25-micron.

"We are waiting for approval from the China government before we break ground on the fab, which should come in mid-October," says Lee, former chip veteran at Texas Instruments. "Many of our customers are also our investors," he says. While he would not identify them, sources indicate that SMIC was getting funding from Hambrecht & Quist. He also confirms earlier reports that SMIC got its sub-micron manufacturing technology from Japan's Toshiba.

To get moving fast, the new foundry has recruited engineering talent from Taiwan and Singapore. Also, he says, "a lot of our key personnel comes from TI." SMIC's executive management includes Richard Chang, former TI chip veteran who started Worldwide Semiconductor Manufacturing Corp. (WSMC) in Hsinchu, Taiwan. WSMC was acquired by Taiwan Semiconductor Manufacturing Co. earlier this year.

A year-and-a-half late, Sun rolls out
its next-generation UltraSparc III

With Intel and Advanced Micro Devices working feverishly so they can put 64-bit processor chips with gigahertz performance on the market next year, Sun Microsystems desperately needs a new MPU to hold its lead in workstation and server markets. Sun claims it still has a 60% market share in workstations and a 20% share in the technical server market.

The new RISC processor was urgently needed by Sun to update its five-year old chip architecture. Finally this week, Sun unveiled the UltraSparc III processor generation--one-and-a-half years late. The chip will run initially at speeds of 600-to-900 megahertz and contain an on-chip controller that handles up to eight gigabytes of storage. It also confirmed earlier news leaks that it's aiming for a 1.5 gigahertz processor next year and a 2.1-gigahertz MPU in 2003.

Texas Instruments is building the UltraSparc III with a 0.15-micron process technology. The high-end 900-megahertz chip will be made with copper interconnects, while the initial 600- and 750-megahertz processors are being fabricated with aluminum metal layers. The processor contains 29 million transistors and seven layers of metal interconnect, with the memory controller and system controller functions occupying one-third of the chip.

The new RISC chip supports a 9.6-gigahertz data rate per second for cache-address data transfers and 4.8-gigahertz rate for memory pathway access. This speed is up to four times the bandwidth of previous Sparc processors. The MPU was designed to link up to several hundred processors.

Later this year, Sun says it will announce UltraSparc III-based systems starting as low as $10,000. A dual 750-megahertz server--with eight gigabytes of memory and an external storage disk array storing 327 gigabytes--will be available by the end of the year, the company says. It will be priced at $90,000.

Zilog's Z80 keeps
going, and going. . .

With new and improved microprocessors popping out every few months, it's hard to believe that there's a 20-year-old processor still on the market. It's Zilog's Z80, designed way back when the company was still owned by Exxon, of all people.

For years, Zilog has sold the Z80 chip into a multiplicity of markets. More than 20 years ago, the Z80 was the leading eight-bit central processor in desktop computers. In the late 80s and 90s, the Z80 architecture was aimed at applications in the traditional eight-bit microcontroller business.

This week, the Campbell, Calif., company showed how it hopes to prolong the life of the venerable Z80 eight-bit processor architecture. It rolled out a new Internet-enabled version of Z80-based chips, while repositioning the product line for mainstream embedded applications.

The eZ80 Webserver is an eight-bit, 50-megahertz chip series designed for Internet-enabled industrial applications such as factory automation systems, point-of-sale terminals, servers, and storage-area networks. The chip will cost $8.15 in quantities of 10,000. It is now available in sample quantities, with volume production slated to begin this January.

Zilog had repositioned the Z80 product line last year for the "Internet-enabled embedded market" by adding a TCP/IP protocol stack to the chip series. Earlier this year, the company took this strategy one step further by saying that its Z80 chip line was optimized for the home-automation/networking markets.

But Zilog appears to be changing its direction again. "With the eZ80 Webserver, Zilog is shifting its strategy a bit," says analyst Max Baron for Cahners In-Stat Group.

"It's a clever shift," the analyst believes. "Zilog's move in the home-automation/networking market were not well received. It makes more sense for Zilog to reposition its eZ80 chip line for the traditional industrial markets," he says. "Industrial is a low-volume market, but it's also a good revenue market."

Wow! TSMC expects to make
$2 billion in net profits this year

Just how good is the foundry business? Terrific, as far as the market leader is concerned. So good, in fact, that Taiwan Semiconductor Manufacturing raised its revenue forecast for this year to $5.30 billion, a 125.4% increase over the $2.35 billion it made in revenues last year. Net income is even more exciting. TSMC estimates that its net profits this year will hit whopping $2.06 billion, up from $790 million last year. In the first eight months of this year, the foundry has reported net sales of $3.01 billion, up 121.6%.

But TSMC's biggest foundry rival--United Microelectronics Corp.--is growing even faster. Also based in Hsinchu, UMC has reported a 240.4% increase in sales to $2.02 billion in the first eight months of 2000, up from $594 million in the January-August period last year. No wonder everyone is starting up a foundry these days.

Startup aims to automate
job of chip designer

An IC physical-design services startup thinks it has found the holy grail for accelerating design productivity--and the answer doesn't lie in EDA tools. Instead, ReShape is focusing its development work on an automated methodology to use those tools.

"EDA vendors are off building more complex tools, and they've left it to the user community to determine how to string tools together to solve a problem," declares David Gregory, a co-founder of Synopsys who joined ReShape as CEO last November. "That job of stringing tools together has become harder and harder. To tackle the problem," he figures, "we have to get to how chips are built, rather than the underlying tools one uses."

To do that, Reshape is building a system that will capture the knowledge of expert chip designers and automate the job of the chip designer. The company has created a "metatool" that automatically can schedule and launch thousands of individual jobs. The company claims this tool will take most chip designs from netlists to final GDSII layout files for a foundry within two weeks. ReShape's tool environment "is mostly Avant, but not exclusively so," Gregory says.

He doesn't expect any competition to come from EDA vendors in creating an automated methodology. "There's an inherent conflict between EDA vendors and flows--the best flows have always," Gregory says.

New process technology
may save $50 per wafer

If something sounds too good to be true, the old saying goes, then it usually is. But that may not be true in this case. Sarnoff, the developer of an exciting new concept, is old and established--it was RCA's premier laboratory--so it could be a winner. What the Princeton, N.J., lab has come up with is a technology it claims could save fabs up to $50 per wafer in processing costs.

For 10 years, IC makers have used silicide-blocking steps in wafer production to prevent devices from being damaged by electrostatic discharge (ESD) through a circuit's input/output cells. High-speed silicided devices required this blocking step to keep silicide out of the shallow junctions between the circuit core and I/O pads, the lab says.

But Sarnoff says its developers have created a new design and layout technique for I/O devices to provide EDS protection without the need for blocking out silicidation. This could save a day of production time, according to Sarnoff. Called TakeCharge, this technology can be applied easily to all chip foundries and it is process independent.

If that wasn't enough, Sarnoff also claims that switching to TakeCharge technology also will result in a reduction in die size and higher IC performance. Wafer fabs using the Sarnoff technology will be able to "produce ICs that actually outperform silicide-blocked ICs in terms of speed and power consumption," claims William T. Mayweather III, director of integrated circuit systems at the lab.

Applied says it can find defects
in high-aspect-ratio structures

Inspecting wafers for defects in high-aspect ratio structures is a major hurdle for chip makers moving to finer circuitry. Now Applied Material has demonstrated breakthrough defect-detection capabilities for ICs with 7:1 high aspect ratio structures such as interconnect vias.

In evaluation tests at International Sematech, Applied's most advanced defect detection technology demonstrated the capability "to accurately and consistently detect these types of defects in high aspect ratio structures at the 180-nm technology node," says the consortium's COO, Rinn Cleavelin.

Applied's multi-perspective laser-scanning system detected critical defects, such as 50-nanometer (0.05-micron) residue, in narrow via structures. The technology was able to detect critical defects in five categories considered to be yield limiting in 0.18-micron (180-nm) processes.

Applied says its technology successfully used laser scan and multi-perspective light collection to consistently identify via defects as well as critical defects in transistor gate and metal structures. The company has already incorporated much of what it has learned from these tests into its new Compass wafer inspection system.

Canon to raise its output
of scanners and steppers

Canon is adding even more production to keep up with the rapidly expanding market for lithography production tools. It is investing another $100 million to expand its manufacturing complex in Utsunomiya, Japan.

The new investment will increase Canon's production of wafer steppers, scanners, and mirror projection aligners to 500 systems annually by the third quarter of next year at its complex in Utsunomiya, Japan. The expansion also will add more production testing and support equipment as well as a 50% increase in cleanroom space in addition to the additional production.

This will jump total investments this year for new capacity in Canon's Semiconductor Production Equipment Group to $260 million. In August, it unveiled plans to build a new plant next year in Yuuki City to make calcium-fluoride (CaF2) material for lenses in next-generation 193-nm argon-fluoride (ArF) lithography scanners. It also will begin large-scale commercial production of its new ArF excimer scanner next year.